
Legislators were bracing themselves for today’s Revenue Estimating Conference, where the newest update on the state’s revenue forecasts were released. The news was worse than some had predicted, giving another black eye to the Branstad/Reynolds fiscal management record. Iowa now faces an additional $131 million shortfall for the current fiscal year, a new blow after the earlier nearly $118 million budget hole in January.
Republicans quickly announced that a new round of budget cuts would not be implemented.
“We not must cripple our schools, public safety and many other essential services with further cuts this year,” Senate Majority Leader Bill Dix said. “Our savings accounts exist for moments such as this.”
Coincidentally, that savings account rationale was used by Democrats earlier in the session to stave off deep budget cuts to Iowa’s mental health services, public universities, Medicaid, the judiciary and many other departments. Republicans rejected that approach, arguing it was inappropriate to use the Rainy Day Fund for such things. Two months later, their 180 reversal is complete.
Despite the second shortfall, Republicans reiterated that Iowa’s economy was strong. Democrats pointed out that that exactly proves the problem with Iowa’s current revenue situation. Even when the economy is humming along, the state’s tax revenue fails to catch up because Republicans have passed too many corporate tax cuts.
“Out of control corporate tax giveaways from Republican lawmakers, Branstad and Reynolds have wrecked the state budget and put it in the red twice this year,” said Representative Kirsten Running-Marquardt. “The bad news from our non-partisan budget experts proves this sort of extreme, special-interest-first fiscal policy is failing everyday Iowans. Republicans can’t blame someone else for the budget mess they created. Iowans deserve better.”
Throughout the 2017 session, legislators have pointed to how wildly irresponsible fiscal leadership from the Branstad/Reynolds administration has led to the current crisis. The Republican corporate tax cuts passed in 2013 now cost the state over $500 million annually. The state used to have a surplus, but Republicans continued to use large amounts of the state’s carry-forward funds to cover their extra spending in recent years that outpaced Iowa’s annual revenue then.
“It’s not raining, there’s a problem with mismanaging our budget,” said Representative Mary Mascher. “We should be looking at our tax credits and our tax cuts that we have provided for out-of-state corporations that do not even reside here.”
There’s a growing push to revisit those expenditures in future legislative sessions, and this additional shortfall should spur action on that front.
“We need to know which programs actually contribute to economic growth and increasing tax receipts, which is what tax credits are supposed to do,” said Representative Chuck Isenhart. “I think it’ll force discussion … In years of declining revenue, our tax credits need to be on the table and they never have been.”
by Pat Rynard
Posted 3/14/17

Elder fraud on rise: Older Iowans lost more than $16.4 million in 2023
A new report shows the number of Americans getting scammed is on the rise, and elder fraud is the most common. Iowa ranked 33rd in the nation for...

Iowa Republicans make outlawing gay marriage key 2024 campaign priority
Iowa Republicans have made outlawing gay marriage a key goal in their 2024 party platform. During the Iowa GOP’s 2024 state convention on Saturday,...

Department of Justice says Iowa immigration law violates US Constitution
If Iowa doesn’t suspend the enforcement of its new immigration law by May 7, the state could face a federal lawsuit, according to the Des Moines...

Rushing: Iowa State president said the quiet part out loud
I want to thank Iowa State University President Wendy Wintersteen for doing us all a favor by finally saying the quiet part out loud: all the...

Iowa sets aside almost $180 million for year two of voucher program
Iowa has committed nearly $180 million in taxpayer funds to support private school tuition in the 2024-25 school year, which is almost $50 million...

Kalbach: Immediate action needed on corporate ag pollution
Iowa agriculture has undergone substantial changes over the past 40 years. We see it all around us. Rather than crops and livestock being raised on...